Industrial output index rebased to 2022-23

MoSPI’s new IIP series shifts the base year from 2011-12 and posts 4.9% year-on-year growth for April 2026.

What happened

• The Ministry of Statistics and Programme Implementation (MoSPI) released the first press release of the new-series All-India Index of Industrial Production (IIP), with the base year shifted from 2011-12 to 2022-23 (=100).
• The rebasing was carried out under the Technical Advisory Committee for Base Year Revision of the IIP (TAC-IIP); the Committee’s report was released on 25 May 2026.
• The new series brings in an updated item basket, a revised weighting structure, and wider sectoral coverage so the index better reflects today’s industrial structure.
• On the new base, IIP grew 4.9% in April 2026 over April 2025, with the index at 118.9 against 113.1 a year earlier.
• Growth was led by Manufacturing (+6.2%); the next monthly release, for May 2026, is scheduled for 29 June 2026.

For Prelims

• What it is: The IIP is a volume index that tracks the short-term movement in the physical output of the industrial sector relative to a chosen base year — it is not a price index and does not measure inflation.
• Who compiles it: Compiled and published monthly by the National Statistical Office (NSO) under MoSPI. The IIP was first introduced in India in 1950, making it one of the country’s oldest high-frequency economic indicators.
• Three sectoral classifications retained: Mining & Quarrying, Manufacturing, and Electricity (now read as Electricity & Gas Supply, with Water Supply, Sewerage & Waste Management added in the wider coverage). Manufacturing carries the dominant weight.
• April 2026 sector growth: Manufacturing +6.2%, Electricity & Gas +4.9%, Water Supply +6.6%, Mining & Quarrying −5.1%.
• Use-Based Classification — six categories: Primary Goods, Capital Goods, Intermediate Goods, Infrastructure/Construction Goods, Consumer Durables, Consumer Non-Durables. In April 2026 the Capital Goods index led at 132.1 and grew 16.0% year-on-year.
• Breadth of growth: 17 of 23 manufacturing industry groups (at the NIC two-digit level) expanded; motor vehicles, electrical equipment and machinery were the top contributors.
• Base year revised: from 2011-12 to 2022-23, aligning the IIP’s reference period closer to other macro indicators.

A base year is the reference period against which output in every later month is measured: the index is set to 100 in that year, so a reading of 118.9 means industrial output in April 2026 is about 18.9% above the average month of 2022-23. Over time the industrial economy changes — new products appear, old ones fade, and the relative size of sectors shifts — so an index anchored to a distant year drifts away from reality. Rebasing refreshes three things at once: the item basket (which goods are tracked), the weights (how much each item and sector counts), and the coverage (which factories and activities are sampled). The 2022-23 series replaces a basket and weighting structure fixed against 2011-12, a year more than a decade old.

India’s practice has been to revise the IIP base roughly every five to ten years in line with international statistical guidance. The successive base years of the all-India index have been 1946, 1951, 1956, 1970, 1980-81, 1993-94, 2004-05 and 2011-12; the 2011-12 series itself was notified in 2017. The move to 2022-23 continues that lineage and brings the IIP’s base into closer step with national-accounts work, where keeping the IIP, GDP and price indices on comparable reference periods reduces measurement mismatch.

Methodologically, the IIP belongs to the family of fixed-weight, base-weighted (Laspeyres-type) production indices: the weight of each item is fixed in the base year, and monthly output is expressed as a ratio to base-year output before being aggregated up using those weights. Items are organised along the National Industrial Classification (NIC) — the new series moves to NIC-2025 at the two-digit (industry-group) level, under which Manufacturing is split into 23 groups. Within each group, individual item groups are tracked; in April 2026, for instance, growth in the motor-vehicles group was driven by auto components, passenger cars and wheel rims, while the electrical-equipment group rose on switchgear and circuit-protection apparatus, and the machinery group on cranes and fire-fighting equipment. This item-level granularity is what lets the headline number be decomposed into specific industrial stories rather than a single opaque figure.

A point of frequent confusion in Prelims is the difference between the IIP and the Index of Eight Core Industries (ICI). The eight core industries — Coal, Crude Oil, Natural Gas, Refinery Products, Fertilisers, Steel, Cement and Electricity — together make up roughly 40% of the IIP’s weight and act as a leading signal for it, since core data is released earlier each month. But the two indices are compiled by different agencies: the IIP is the NSO’s (MoSPI), while the ICI is compiled by the Office of the Economic Adviser, DPIIT (Ministry of Commerce & Industry). The core index covers only eight infrastructure-type industries; the IIP is far broader, spanning mining, the full manufacturing range and electricity. A strong core reading does not mechanically equal a strong IIP, because the roughly 60% of the IIP outside the core — much of consumer-goods and capital-goods manufacturing — can move differently.

Two ways the IIP is sliced

The IIP is published under two simultaneous classifications, and a complete revision note carries both. The sectoral (industry-of-origin) classification groups output by where it is produced — Mining & Quarrying, Manufacturing, and Electricity (with the new series widening the utilities side to include Electricity & Gas Supply and Water Supply, Sewerage & Waste Management). Manufacturing dominates this split, so the headline IIP number largely tracks factory output. The use-based classification instead groups output by the economic purpose of the good, and this is where analysts read demand signals.

Why this matters analytically: Capital Goods output is read as a proxy for investment demand — a 16.0% rise signals firms buying machinery and equipment. Infrastructure/Construction Goods track public and private capital spending; Consumer Durables and Non-Durables read household demand, with non-durables (everyday consumables) often taken as a gauge of rural and mass consumption. In April 2026 the top three contributors to overall growth were Intermediate Goods, Capital Goods and Infrastructure/Construction Goods — an investment-led rather than consumption-led pattern, since consumer categories grew more slowly. For Mains, that contrast is the usable analytical point: industrial momentum driven by capital and intermediate goods, with consumer demand lagging.

One caution the index itself invites: the IIP is a monthly Quick Estimate that is later revised as more production returns come in, so any single month’s figure is provisional. It captures volume, not value — it says nothing about prices, profitability or the unorganised sector’s output, which it under-represents. And because Mining & Quarrying carries a relatively small weight, its −5.1% contraction in April 2026 did not pull the headline down the way a similar fall in Manufacturing would have.

Reading the new series also calls for care over comparability. Because the basket and weights have changed, growth rates from the 2022-23 series are not strictly comparable with figures from the old 2011-12 series — which is why MoSPI publishes a back-run of monthly indices and growth rates (the release carries the last thirteen months) so users can read recent momentum on a consistent basis. The headline 118.9 for April 2026, set against 113.1 a year earlier, is meaningful precisely because both are measured on the same new base. When the IIP is rebased, every downstream user — from the national accounts that draw on it, to the Reserve Bank’s assessment of activity, to market analysts — has to re-anchor their reference series, which is one practical reason rebasing is done deliberately and infrequently rather than often.

Why rebasing matters in the larger picture: an index frozen to a stale base steadily misweights the economy. If, say, electronics or electrical-equipment manufacturing has grown faster than the base year assumed, an old-base index gives it too little weight and understates real industrial dynamism; conversely it can overstate the role of shrinking activities. Refreshing the base to 2022-23 corrects this drift so policymakers reading the IIP are looking at the industrial structure as it actually is today, not as it stood over a decade ago. For an aspirant, the takeaway is the principle, not just the number: credible official statistics depend on periodic methodological renewal — updated baskets, weights and coverage — and the IIP rebasing is a clean example of that discipline at work.

What it is NOT

• Not a price index: the IIP measures the quantum of production, not the cost of goods — inflation is captured by the CPI and WPI, not the IIP.
• Not the same as the Eight Core Industries index: different scope (8 vs the whole industrial sector) and different compiling agency (DPIIT vs MoSPI).
• Not a final figure: the monthly number is a Quick Estimate, revised in later releases.
• Not a measure of GDP or GVA: the IIP feeds into national-accounts estimation but is itself only a short-term industrial-output indicator.

For Mains

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